Category Archives: Value Propositions

This post is to tell you about our next event which is all about turning your products and services into things people love to buy. This is how to transform your industry as well as your business. I really hope you can come.
We have got great speakers, brand new content and an group of like minds where you can discuss insights, ideas and your experiences. We are calling the event Game Changers because this is what Game Changers do.

Why should you come?

This Game Changers event is for business leaders who are not content with the status quo and want their business to make a difference. If you are on this email list, it is highly likely this describes you.

The Game Changers event is a chance to explore and discuss how you can do this. You will have the chance to learn from the experience of others in driving for exceptional growth. This is about turning a business from ordinary into game changing. We will explore the characteristics of high growth businesses and draw out a number of critical lessons.

Game Changers turn their products and services into something customers love to buy. This needs not just game changing insights about customers, but also the ability to develop products and services that go beyond what customers want and deliver something they could not imagine today.

Speaker highlights

Mike Harris

The Original Game Changer

Mike Harris

Mike’s first big play was to transform current account banking when he created First Direct: a bank without branches dedicated to making sure customers felt totally taken care of.

Mike went on to challenge the BT monopoly on fixed line telecoms and turned Mercury Telecoms into a profitable player.
Then he created Egg Internet banking, the first online only banking service. Mike now works with entrepreneurs to help them understand what it takes to be a Game Changer. Mike will tell us the most important things he learned and what makes the difference between business as usual and being a game changer.

John Scriven

Game Changing Insights on Customer Behaviour

John Scriven worked at South Bank University with a cutting edge research and insight team founded by Andrew Ehrenberg and later developed with Byron Sharp. The team’s latest book is called

How Brands Grow – what marketers don’t know.

Andrew Ehrenberg pursued empirical and behavioural studies to establish how consumers behave and uncovered a number of findings that blow away a lot of conventional thinking about customer loyalty and how brands actually get growth. His work is used today by many top global brands like Coca-Cola, Mars, Unilever & P&G. John will come and share the team’s top five insights.

These insights have been uncovered over 40 years of painstaking study and research about how customers actually behave and how markets evolve in response to consumer behaviour.

John will show how this applies to your business whether large medium or small, whether B2B, consumer or services and how you can use these insights to make decisions that will attract more customers and help you get more growth.

When Bruce McColl the global CMO at Mars discovered the Ehrenberg analysis, he described it as “an epiphany”

Here is Byron Sharp discussing some of the insights that John will share with us in a Tedx Talk. It may be 15 minutes, but it is worth it.

When I read the story of Arunachalam Muruganantham, I was in awe at the 1300 microbusinesses he has helped to create and amazed to learn about the 1 million jobs he has stimulated as well as the health and hygiene benefits he has helped Indian women obtain. It is incredibly inspiring. Possibly also like me; you are slightly in awe of his determination and courage?

But sometimes perhaps we fail to learn lessons when we read about experiences like this. Especially when the circumstances seem so different from our own situation. So I took a long hard look at Arunachalam’s story. Here were my five main takeouts.

Lesson one: PINPOINT the problem: Keep on researching until you have not only identified the customer problem but you really understand it.

Arunachalam’s doggedness in trying to understand the womens’ problems and the real reasons for their behaviour during menstruation (which was threatening their health, hygine and lifestyle) is remarkable. What I noticed is that he tried everything in this phase of his work. Despite the immense social and cultural stigmas he tried out prototype products, he talked to women about their worries, he observed their behaviours and finally he put himself in their shoes and experienced the issue as best he could. Funnily enough, he never showed them a concept board and said “would you buy this?”. He did much of the research himself.

He combined this exploratory work with research into the competitors and their products and sought to understand the home made alternatives that women were using.

He spent 4 years working at this question, which is extraordinary, but probably explains why he came up with something that really works.

Lesson Two: POSITION the product by explaining what it does better than the alternatives. You have to explain how your product solves the problem better than the alternatives that the customer uses.

In some cases for the customer to see your product as a better, you may have to change how the customer see’s what is important. This is very difficult. The customers existing paradigm may not allow you to sell the product without education as to how it helps them.

In Arunachalam’s case, the alternative forms of sanitary protection that were available were either too expensive, unavailable or were unhygienic and ineffective homemade solutions. Apparently, Arunachalam had solved all these problems, so it looked like it would be easy to stand out.

But there was a bigger hurdle. Being private and discreet was overwhelmingly important and seen by women as a bigger issue than staying hygenic. Homemade protection was an easy way to stay discreet. Going out to buy pads was not discreet. This is the barrier he needed to overcome. As is often the case the reasons why people buy stuff or don;t buy stuff are personal and emotional. Here was no different.

Arunachalam had to help women understand that being hygienic was more important to them so they would be willing to go and ask for a pad. His solution was to use word of mouth advocacy and testimonials by the women involved in the local microbusinesses.

Lesson Three: Keep PERFECTing your purpose and your story. As time goes by do keeep your resolve to do something that really helps customers not just makes money in the short term. It will keep you going and make your products and solutions even better.

Especially in this case where people will keep telling you “That will not work” or “You must be mad”.

Instead of being put off, Arunachalam used what he learned on his journey to take his purpose to a whole new level. He had started out by trying to make sanitary pads that Indian women could afford. He ended up realising that the best way to do this was for women to make them locally. He did not manufacture pads and maximise in a big factory for short term profit. he designed a machine that local women could use to make the pads. He helped to create 000’s of microbusinesses and millions of jobs which made the whole project even more fulfilling for him and for many small business owners and communities.

He clearly disliked the major branded manufacturers who charged high prices for sanitary protection that women really needed and then sold it to them with dreams of an active lifestyle whilst ignoring the real issues around hygiene. Arunachalam challenged the way that big business approached sales of sanitary protection by going local. He stuck to his guns on affordability and providing a hygienic solution as a result he also created new businesses and new jobs.

The quote from BBC news sums it up for me

He was once asked whether receiving the award from the Indian president was the happiest moment of his life. He said no – his proudest moment came after he installed a machine in a remote village in Uttarakhand, in the foothills of the Himalayas, where for many generations nobody had earned enough to allow children to go to school.

A year later, he received a call from a woman in the village to say that her daughter had started school. “Where Nehru failed,” he says, “one machine succeeded.”

This whole new level of purpose must have powered him forward when he hit obstacles.

Lesson Four: PROMOTE be available and understood: The product has to be available where the customers can buy it and customers need to understand what it is, what it does and where it comes from.

In this case Arunachalam realised that localised small scale production in the hands of a local group was the way to ensure the product was available where it was needed most and that this enabled sales to happen through word of mouth. One woman could explain to another how the product worked and where it came from. This method helped with the education task to reframe the women’s view of sanitary protection and help them see being hygienic was at least as important as being discreet.

Lesson Five: PITCH your story to get help: When you have clarity about purpose and have developed a solution then it may be that there are thousands of people out there who can help you deliver it.

Having a clear PITCH and story is essential to make this happen. Arunachalam must have put an amazing amount of effort into explaining to women (pitching) why his machines to make sanitary pads would help them improve their lives. He is obviously still doing this today as he speaks with students and young entrepreneurs and shares his experience.

But then I read he is planning to go much bigger.

“My aim was to create one million jobs for poor women – but why not 10 million jobs worldwide?” he asks.

He is expanding to 106 countries across the globe, including Kenya, Nigeria, Mauritius, the Philippines and Bangladesh.

There are lessons in here for both entrepreneurs and leaders in established larger businesses. There are parallels in your situation. So when you read stories about entrepreneurial success, do try and draw out the lessons for yourself.

Whilst I cannot promise that Differentiate will always help you show the dogged persistence and determination of Arunachalam, the decision points you face are the same as the ones that he describes here.

Each of the five steps in our approach to turning your purpose into products customers love to buy will force you to examine the same questions and apply them to your business.

Like this:

Last week I was fortunate to be at one of Mike Harris’ ICONIC SHIFT mentoring events. It was motivating to be with an inspiring bunch of entrepreneurs covering industries from healthcare, pensions, financial services, fashion, food and business services; especially when each entrepreneur is aiming to challenge the way things are done in their industry and turn their business into a game changer that that delights customers and disrupts an industry.

Mike shared with us his model of high performance leadership drawing on his experience of creating game changing businesses in current account banking with First Direct, fixed line phones at Mercury Telecoms, credit cards at Egg and internet security at Garlik.
Like all the best ideas, you get a lot from them the first time but then you get more on the second, third and fourth time of hearing them.

But the real reason for this blog is that during the event it finally dawned what really bugs me, and I want to do something about.

Setting goals and purpose

Business owners and business leaders want to maximise shareholder value. It is an explicit goal of all public and of many private businesses. But the irony is if the leader makes this the primary goal they will be less successful at achieving it than if they start with a bigger purpose that helps customers in some way. Why is this true?

Value Adders vs Value Extractors

Starting with a focus on creating shareholder value will lead you to what I call value extractor strategies. These strategies are effective at maximising the short term revenue extracted from customers. They are tempting, it appears a much faster way to hit this yera’s profit targets. But in the process you engage in a stressful relationship with customers.

The value extractor tends to view their customers in the same way this cowboy regards his cattle. They are there to deliver a source of income and to be reined in with the lasoo.

So for example, customer acquisition is done with value incentives and offers which lead to contracts that trap customers into buying more than they need. Mobile phone companies and utilities are expert at this. Energy firms leave us stranded on inefficient tariffs, mobile phone operators use tariff complexity to confuse customers into buying services they don’t need.

In consumer product and food companies it is a lot easier to shave a bit of quality and bank a £m on the bottom line than to perusade the finance director that the product quality improvements will deliver more revenue by attracting customers. So business leaders are tempted to shave product quality to save money in the short term.

There is another way that delivers better results than this.

Value adders continually improve the product and service and find ways to go beyond what customers want because they know this will attract more customers in the long term. By going beyond what customers want and they stay ahead of their customers and competitors.

I always think value adders are more like this cartoon character fitting the last piece of the jigsaw to make things just right. they are supplying something that solves a problem for their customers and design it to fit.

Leaders who deploy these strategies know that if they offer something attractive to customers that really helps them, then they will come back for more and even more importantly tell their friends about it.

Value adders also create businesses that are more fun to work in as well as delivering better value to customers. Value adders believe businesses must engage all the participants not just the shareholders. They must engage the customers, the employees, the management and the local community as well. And we have seen many examples of this.

Galaxy reshaped chocolate products in the Middle East by bringing superior quality and design to everyday supermarket products

The most over-used example is Apple who reinvented mobile communications whilst Nokia made lower cost mobile phones using the technology they already had.

Miracle Gro has entered new market categories through it’s determination to make products that make gardening easier for everyone.

P&G have taken the excess margins out of skin care whilst delivering superior products with Olay.

What distinguishes these firms was a purpose beyond shareholder value

These firms created a purpose beyond money and this created better shareholder value than the ones that start with maximising shareholder value as the goal. This is still business not a community or some higher purpose or campaign. It is simply about helping improve people’s lives in a small but practical way.

These businesses also end up as the most rewarding to work in, deliver great shareholder returns and always experience the most growth. They deploy VALUE ADDER strategies that help customers, improve the products, enhance the customer experience and as a result grow by attracting more customers.

I know this idea has been discussed in many places such as by Jim Collins in Good to Great. Collins talks about this from the perspective of the CEO and the mission. But my take on this is that the principle can be adopted for every brand development, every growth strategy and every business. What frustrates me is how many people still don’t seem to “get it”.

So every time I experience a value extractor business whether as a consultant, manager, advisor or as a customer, a voice inside me pipes up and questions why do they do this? Don’t they realise there is a better way? I don’t like it when people are not doing the best thing for their business. It is bad for customers, bad for staff and bad for shareholders, bad for growth.

SO WHAT NEXT – I will be less frustrated and take action!

I realised this week, I need to stop moaning about this and stop getting frustrated. I should do something about it.

My whole consulting service is devoted to helping value adders. So I need to work with more of them to create more examples of how this strategy works. I have seen that value adders want to turn their products and services into things people love to buy. That is what we do at Differentiate, so we can help.

So I set my own 10 year goal to help 10-20 business leaders transform 20 products and services into something that helps to make customers lives a little better. It is much more satisfying to make customers smile than to extract money from them. And I need these examples to get the message out there that value extraction is not best strategy for anyone, certainly not for customers, but not for staff and shareholders as well.

Clarifying purpose

It is an immense relief to have clarified my purpose and know the reason to build Differentiate in the next 10 years. I plan to share the bumpy road of experiences through this blog, my Google+ and my email list.

If you like this journey and want to explore it with me, please subscribe for blog updates (top right) or stay on my email list or sign up for email updates on the Differentiate website. You can also follow me on Google+ and Twitter.

If you are even more interested in this, I am creating a group who will meet every two months to shape and develop this path and ensure we succeed. Call it a non exec role, an advisory board. If you are interested, please do get in touch? More on that later.

I was reading through some posts in our mentoring support forum the other day. I saw a comment from Mike Harris. (Mike was the CEO who launched First Direct banking, he went on to transform Mercury Telecoms, then created the EGG bank and started up and sold Garlik, the personal internet security firm).

Insight from Mike Harris

In the forum post he made an observation about why corporate deals and negotiations can fail at the last hurdle. Mike highlighted that when corporate deals fail this is usually for a number of reasons.

The value proposition isn’t strong enough for the corporate

The value proposition hasn’t been communicated effectively to or within the corporate

They don’t believe you can deliver

They don’t believe the economics

I was struck immediately by the parallels between this thinking and what EGL does for our clients. Mike’s thinking can be converted to help you in your approach to creating products and services that customers want to buy.

How to convert this thinking to action in your business?

Mike’s comment does not only apply to corporate deals, it explains why people buy from you or not. For those of you thinking about your products and services and your position and value in the market, you can take each of these points and turn them into an insight about why people DO NOT buy from you. You can translate this into the four reasons people do not buy from you.

The value proposition isn’t strong enough for them ( your product or service does not solve their problem)

The value proposition hasn’t been communicated effectively to them (they don’t think your product or service will solve their problem)

They don’t believe you can deliver (not sure you have the ability or resources to solve their problem)

They believe thay can get something else good enough for a lower price (someone else can solve their problem)

Have a think about a prospect or consumer that did not buy your product or service and identify which of these thoughts might have been true for them? This should lead you to an action that will help you win the customer next time around.